Bank of Korea leaves rates alone for now

SEOUL, Oct. 9 (UPI) -- The Bank of Korea kept its key lending rate at 2 percent for the eighth consecutive month Friday to support stability and growth, the bank said.

"We will maintain an accomodative policy stance for the time being, placing a priority on boosting economic growth and stabilizing the financial market while keeping a close watch on the development of advanced economies and raw material prices," bank Gov. Lee Seong-tae said, The Korea Times reported.

Lee said the bank could raise the interest soon, but not as early as next month.

"A rate hike is not a thing that will take place in the distant future," he said, adding, "This should not be taken as a signal of a rate increase next month."

Lee said increases in mortgage lending had slowed "helped by tougher regulations."

On the other hand, "it is too early to say housing prices are stabilizing," he said. "But if stiffened rules are found to be effective, it would lessen the burden on monetary policy authorities."

Some analysts predict Korea could be the first bank to raise key lending rates after Australia, which did so earlier this month.